China's money goes online

Chinese depositors have left around $1 trillion with their banks, a pool overseas banks are eager to tap

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HONG KONG, China (CNN) --Chinese investors are able to manage their money at the click of a mouse for the first time this week, as online banking kicks off in China.

London-based HSBC and Hong Kong-based Bank of East Asia began offering online banking on Monday, while HSBC subsidiary Hang Seng Bank is starting its service Tuesday, December 31.

Both HSBC, the largest bank in Hong Kong, and the Bank of East Asia, the fifth-largest, claimed to be the first overseas banks to offer online banking in China.

"This new service removes time and geographical constraints on banking transactions, allowing Bank of East Asia customers to access their bank accounts and other banking services anytime, anywhere," Bank of East Asia said in a statement late on Monday.

"The launch of Internet banking services here has opened a new chapter for HSBC's personal financial services in mainland China," Dicky Yip, CEO of HSBC's China business, said in an online statement.

Popular way of avoiding lines

Hang Seng, Hong Kong's third-biggest bank, said it is offering digital banking for its customers at its four mainland branches, in Guangzhou, Shanghai, Shenzhen and Fuzhou.

Clients will be able to check their balances, make transfers and time deposits and check rates. Hang Seng has around 250,000 online customers in Hong Kong, where online banking is a popular way to avoid the long lines common with traditional banking in the city.

Those online customers account for around 12 percent of the bank's total transactions.

Standard Chartered, the No. 4 bank in Hong Kong, has also won approval from authorities to start online banking in China but has not yet confirmed whether it will do so.

Overseas banks are eager to enter China's banking industry, aiming to tap the estimated $1 trillion in deposits there, and have been opening branches and lining up local partners as a result.

Shanghai's Pudong Development Bank Co. said Tuesday that Citibank will buy a stake in it, becoming a strategic investor as the Shanghai bank prepares for overseas competition in 2007. (Full story)